Obama: Failed Stimulus Plans

Back in early January, when Barack Obama was still President-elect, two of his chief economic advisers — leading proponents of a stimulus bill — predicted that the passage of a large economic-aid package would boost the economy and keep the unemployment rate below 8%. It hasn't quite worked out that way.

On his CNN show last night, Anderson Cooper chronicled the Obama administration’s unfulfilled promises and wasteful spending on high-speed rail projects across the country. Cooper and investigative reporter Drew Griffin reported that, while the administration sold its $12 billion in projects as high-speed rail, the funding has spent has largely been used to make existing trains slightly faster. In Washington State, for instance, $800 million have been used to reduce the length of the trip from Seattle to Portland by 10 minutes.

Some top Congressional Democrats are losing faith in President Obama's signature employment initiative, the promotion of so-called "green jobs." They've lost so much faith that on Thursday one liberal Democratic member of Congress called the president's green jobs program "a lot of talk."

The $787 billion stimulus plan is turning out to be far less stimulating than its architects expected. Back in early January, when Barack Obama was still President-elect, two of his chief economic advisers — leading proponents of a stimulus bill — predicted that the passage of a large economic-aid package would boost the economy and keep the unemployment rate below 8%. It hasn't quite worked out that way.

On February 17, 2009, in remarks at the signing the $787 billion Stimulus bill, Pres. Obama promised it would lift two million people out of poverty. However, according to the latest available Census Bureau data, quite the opposite occurred. In fact, there are now 2.6 million more people living below poverty.

At this point, Obama smiled and interjected, "Shovel-ready was not as ... uh .. shovel-ready as we expected." The Council, led by GE's Jeffrey Immelt, erupted in laughter. The Obama administration promised the Recovery Act ("the stimulus") would prevent the jobless rate from going over 8%. It now stands at 9.1%.

“We’re going to pass through some rough terrain that even a Wrangler would have a tough time with,” Obama said, in reference to the Jeep truck produced at the Toledo plant. The quip was met with boos from the otherwise supportive employees in the audience.

Since then, however, the economy has fallen back to earth, and “Recovery Summer” looks more like a bad bet. Private sector job growth has fallen by two-thirds, and the unemployment rate is still at a sky-high 9.5 percent. And if the size of the U.S. workforce, as measured by the Labor Department, had stayed constant since April—instead of shrinking by a million—the unemployment rate would be 10.4 percent.

Back in January 2009, Christina Romer and Jared Bernstein produced a report estimating future unemployment rates with and without a stimulus plan. Their estimates, which were widely circulated, projected that unemployment would approach 9% without a stimulus, but would never exceed 8% with the plan.

The $787 billion stimulus plan is turning out to be far less stimulating than its architects expected. Back in early January, when Barack Obama was still President-elect, two of his chief economic advisers — leading proponents of a stimulus bill — predicted that the passage of a large economic-aid package would boost the economy and keep the unemployment rate below 8%. It hasn't quite worked out that way.

The Congressional Oversight Panel reported Thursday that by selling 45% of the stock it had in GM, Washington has "'locked in' a loss of billions of dollars and thus greatly reduced the likelihood that taxpayers will ever be repaid in full."

Bailout defenders had thought that GM's IPO would show critics that the government could make money on the bailout. But when "Treasury received a price of $33 per share," it sold "well below the $44.59 needed to be on track to recover fully taxpayers money."

HOPEWELL JUNCTION — SpectraWatt, the solar-cell manufacturer that began operating here in early 2010 to great acclaim, only to close a year later, has filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy code.

Some top Congressional Democrats are losing faith in President Obama's signature employment initiative, the promotion of so-called "green jobs." They've lost so much faith that on Thursday one liberal Democratic member of Congress called the president's green jobs program "a lot of talk."

Federal and state efforts to stimulate creation of green jobs have largely failed, government records show. Two years after it was awarded $186 million in federal stimulus money to weatherize drafty homes, California has spent only a little over half that sum and has so far created the equivalent of just 538 full-time jobs in the last quarter, according to the State Department of Community Services and Development. The weatherization program was initially delayed for seven months while the federal Department of Labor determined prevailing wage standards for the industry. Even after that issue was resolved, the program never really caught on.

A new report from the Congressional Budget Office (CBO) finds that President Obama’s economic stimulus program helped nearly double U.S. debt. The 2011 Long-Term Budget Outlook, released Wednesday morning, reports that the “the combination of automatic budgetary responses” and Obama’s stimulus “had a profound impact on the federal budget.”

A $500 million green jobs program at the Department of Labor has so far provided only 15 percent of current participants with jobs, leading the agency's inspector general to recommend that the bulk of the money be returned to the Treasury. According to the Labor IG report, as of June 30, grantees had placed 8,035 participants into jobs, or 10 percent of the program's target. Long-term unemployment numbers are worse, with 1,336 participants finding jobs for six months or longer. That's 2.5 percent of current participants, and 2 percent of the program's final target of 69,717.

The council reports that, using “mainstream estimates of economic multipliers for the effects of fiscal stimulus” (which it describes as a “natural way to estimate the effects of” the legislation), the “stimulus” has added or saved just under 2.4 million jobs — whether private or public — at a cost (to date) of $666 billion. That’s a cost to taxpayers of $278,000 per job.

President Obama's $5 billion stimulus injection into a decades-old program to help lower energy bills for millions of low-income families by retrofitting their homes to improve efficiency has been plagued by cases of mismanagement, waste and fraud in several states.

This paper finds that (1) the home buyer tax credits had an insignificant effect on the number of homes sold, (2) sellers in markets with low and stable prices captured most of the credit, and (3) The effects of the credits sharply reversed after expiration. ... Rather than igniting 'animal spirits' or pulling housing demand forward from the distant future, the tax incentives were a simple redistribution of wealth.

Solyndra was touted by the Obama administration as a prime example of how green technology could deliver jobs. The President visited the facility in May of last year and said "it is just a testament to American ingenuity and dynamism and the fact that we continue to have the best universities in the world, the best technology in the world, and most importantly the best workers in the world. And you guys all represent that. " I was told by a security guard to get my [stuff] and leave," one employee said. The company employs a little more than 1,000 employees worldwide, according to its website.

NASHVILLE, Tenn. -- A Channel 4 analysis of how the Tennessee Department of Transportation is spending stimulus dollars found that federal taxpayers spent an average of $161,500 per job created and that some paving jobs, which were temporary, cost taxpayers more than $1 million each.

President Barack Obama on Thursday toured a vehicle battery plant in Michigan, touting his administration’s focus on green technology and jobs, at a corporation where federal money authorized by the economic stimulus law that Obama signed at the beginning of his presidency had created "green" jobs at a cost of about $2 million in federal subsidies per job.